In life, there are myths and then there are facts. However, in most cases, the truth is lost in between these two extremes. For instance, some of the real commission advance myths that you will come across are, truly speaking, not even myths. They are outright lies propelled by a lack of understanding and sometimes a lethargy towards research. Today we are going to bust these myths and set you on a path of handsome real estate commission advances. So, here we go!
1. Successful Agents Don’t Seek Commission Advances
Wrong! Most successful real estate agents actually apply for commission advance. Like you, they have bills and salaries to pay. They are also very careful not to drain their cash flow to the point of not being able to transact.
2. Applying for a Commission Advance Is Not Financially Prudent
Hmm! Why? Why would you suffer a cashflow crunch when you have an avenue such as a real estate commission advance? Just as other businesses seek lines of credit to stay liquid, a commission advance feeds into your cash flow. Since traditional lenders shy away from lending to real estate agents due to revenue unpredictability, a commission advance is one of the most convenient avenues that a real estate agent can revert to.
3. Everyone Will Know If You Take a Commission Advance
Well, only if you tell them. If your commission advance provider is the kiss-and-tell type, look for a more credible and discreet one. Look for commision advance companies that have a solid reputation of advancing commissions speedily and confidentially. Such a company should have an option for online application. Pssst! And your clients will never know; unless you tell them.
4. If a Sale Flops, You Are Cooked
Although most real estate deals are closed successfully, a few aren’t. When this happens, some people assume the agent’s goose is cooked, especially if they had taken a real estate commission advance. Nothing is further from the truth. Reputable cash advance companies will not abandon you at your hour of need. They will work with you towards replacing the advance with a future earned commission. You might be charged a little extra for the extended time, which you will pay when future commissions are earned.
5. You Are Better Off Getting an Advance from Your Broker
Fact check: Not all brokers provide in-house commission advances. Even where a broker provides this option for their agents, it’s important to first establish what the true cost of the advance is. What happens if a sale fails? Will you be bound by the terms of your contract to repay the advance before you earn another commission? What if you change companies? The reality is that agents hate the idea of owing their broker, and neither do they tolerate their broker owing them. The solution: a third-party real estate commission advance company.
6. Commission Advances Will Hurt Your Credit Score
This is a flat, stinking lie! A commission advance is just that, an advance. Not a loan! Nowhere will you be required to provide a credit report from credit score bureaus. No one will conduct a hard-pull credit inquiry on you. Reputable commission advance companies keep your relationship with them private. You don’t have to worry about being reported to the credit bureaus. If any case, a commission advance makes you liquid enough to be able to pay your bills on time, every time! The impact is an improvement in your credit score.
7. Commission Advances Are Highly Prohibitive
With a reputable commission advance company, there are no holdbacks, no wire fees, no admin fees, no application fees, no minimum fees and no exit fees. As if this is not enough (cliché purposefully used), you can pay fixed fees of as low as 5%; more for extended periods.